Growing Economies

Question 1

Define Globalisation

Answer 1

The process that enables markets to operate internationally. It requires the free movement of products resources and finance so that businesses can sell in a world wide market.

Question 2

Define PESTEL

Answer 2

Political
Economical
Social
Technological
Environmental
Legal

Question 3

When would you use PESTEL?

Answer 3

When assesing external factors of a business

Question 4

Define economy

Answer 4

The trade of goods and services in a country

Question 5

Define emerging economy

Answer 5

When a country which isn’t wealthy has an economy which is still developing

Question 6

What are the BRICS countries?

Answer 6

Brazil
Russia
India
China
South Africa

Question 7

What are the MINT countries?

Answer 7

Mexico
Indonesia
Nigeria
Turkey

Question 8

What is the formula for economic growth?

Answer 8

Change in GDP

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Question 9

Name the indicators of economic growth?

Answer 9

Trade opportunities for businesses

Employment patterns

Question 10

Why are trade opportunities for businesses seen as econ growth?

Answer 10

When there is a trade opportunity businesses can move into that sector as it is profitable

Question 11

What are some changes in employment patterns?

Answer 11

More women in work
More migration
More home working
Sector change e.g. primary to secondary

Question 12

What are some indicators of growth?

Answer 12

GDP
GDP Per Capita
GDP Per Capita at PPP
HDI

Question 13

Define GDP

Answer 13

Gross Domestic Product: The total value of goods and services produced in an economy in 1 year

Question 14

What is GDP Per Capita?

Answer 14

The GDP divided by the population. GDP per head

Question 15

What is GDP Per Capita at PPP?

Answer 15

Purchasing power parity: A measure of real growth that uses the price of purchasing a standardised basket of goods and services in order to compare prices around economies.

Question 16

Define first mover advantage

Answer 16

Invention, when you come up with a concept first

Question 17

Define international trade

Answer 17

The exchange of capital, goods and services across international borders.

Exporting and Importing

Question 18

Define export

Answer 18

A good produced here then consumed overseas

Question 19

Define import

Answer 19

A good produced overseas then consumed here

Question 20

Define specilization

Answer 20

Being able to perform a specific job/task at a high level

Question 21

Define comparitive advantage

Answer 21

An economies ability to produce goods/services at a lower opportunity cost than their trade partners. International

Question 22

Define competitive advantage

Answer 22

A firms ability to produce a good/service at a lower cost than its competitors

Question 23

What are some benefits of specilisation?

Answer 23

Increases productivity
Improves efficiency
Jobs become easier
Sustain comparitive advantage

Question 24

What are some drawbacks of specilization?

Answer 24

Limits focus to only one task
Limits output as it takes longer
Requires training which is expensive
Limits innovation
Inability to be dynamic

Question 25

Define FDI

Answer 25

Foreign Direct Investment- When an investor from another country invests into a business which they gain (an amount) of control over

Question 26

Define Inward cross border investment

Answer 26

Recieving investment from overseas

Question 27

Define outward cross border investment

Answer 27

Build or buy facilities overseas

Question 28

Define greenfield cross border investment

Answer 28

Vertical- Build a completely new business overseas

Question 29

Define brownfield cross border investment

Answer 29

Horizontal- Buy an existing business/purchase or lease facilities. E.G. EE took over T Mobile

Question 30

What are benefits of Greenfield?

Answer 30

100% ownership Economies of scale Creates jobs

Question 31

What are some disadvantages of greenfield investment?

Answer 31

High risk High costs Govt regulations

Question 32

What are some advantages of brownfield investment?

Answer 32

Less risk as already established business Eliminate competition Less start up costs

Question 33

What are some disadvantages of brownfield investment?

Answer 33

Facility or infrastructure may need upgrading | Locational constraints

Question 34

FDI benefits for the host country

Answer 34

``` Brings new jobs Brings new tech Increases exports Better infrastructure More tax revenue ```

Question 35

Define Tariff

Answer 35

Adding a tax to a good that has been imported

Question 36

Define import quota

Answer 36

A restriction to the amount of goods that can be imported